State Street (STT) AI Stock Analysis

• Market Cap: $28.03B
• Dividend Yield: 3.02%
• Average Volume (3M): 2.34M
• Price to Earnings (P/E): 11.0
• Beta (1Y): 0.96
• Revenue Growth: 15.02%
• EPS Growth: 66.71%
• Country: US
• Employees: 52,711
• Sector: Financial
• Sector Strength: 84
• Industry: Asset Management
• EPS (TTM): 2.04
• Shares Outstanding: 285,181,600
• 10 Day Avg. Volume: 1,813,268
• 30 Day Avg. Volume: 2,338,935
• PEG Ratio: 1.13
• Price to Book (P/B): 1.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.09
• Enterprise Value/Market Cap: 2.10
• Enterprise Value/Revenue: 1.16
• Enterprise Value/Gross Profit: 4.54
• Enterprise Value/Ebitda: 5.63
• 1Y Price Target: $103.30
• Price Target Upside: 5.69% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

State Street's overall score reflects its solid profitability and attractive valuation, which are somewhat offset by high debt levels and negative cash flows. Technical indicators suggest caution, while the earnings call provides a positive outlook for future growth despite some challenges.

Positive Factors

International Expansion

STT has entered into an agreement to acquire Mizuho's global custody and related businesses outside of Japan, supporting the overseas investments of Mizuho’s Japanese clients.

Operating Leverage

State Street delivered a 5th straight quarter of year-over-year positive operating leverage, showing efficiency in managing expenses.

Strategic Focus

Strategic focus on low-cost ETFs, capturing new flows 2x industry.

Negative Factors

Asset Management

AUM net outflows were driven mainly by a singular client transition, suggesting some instability in asset management.

Interest Income

Net interest income missed expectations due to lower net interest margin, although this was mostly offset by higher earning assets.

Leverage Ratio

T1 leverage ratio below target range could weigh on consensus buyback expectations.

State Street Business Overview & Revenue Model

Company Description

State Street Corporation (STT) is a leading global financial services provider headquartered in Boston, Massachusetts. The company operates in the financial sector, offering a wide range of products and services, including investment management, investment research and trading, and financial data analytics. State Street is renowned for its expertise in asset servicing and management, catering to institutional investors such as asset managers, insurance companies, and pension funds. The corporation plays a vital role in the global financial infrastructure, providing essential services that support the investment process.

How the Company Makes Money

State Street makes money primarily through three key revenue streams: investment servicing, investment management, and investment research and trading. The investment servicing segment generates revenue by offering custody, accounting, administration, and securities lending services to institutional investors. This segment is the company's largest revenue contributor. The investment management division, operating under the brand State Street Global Advisors, earns fees by managing assets on behalf of clients, including mutual funds, ETFs, and institutional portfolios. The investment research and trading segment generates income by providing trading, research, and securities lending services. Additionally, State Street's partnerships with other financial institutions and the expansion of its data and analytics offerings contribute to its revenue growth. Factors such as changes in interest rates, market volatility, and regulatory requirements can significantly impact the company's earnings.

State Street Financial Statement Overview

Summary

State Street exhibits robust profitability with strong EBIT and net profit margins, but faces challenges with high debt levels and negative cash flows. The company needs to improve cash flow sustainability to mitigate potential risks associated with its debt.

Income Statement

State Street's income statement shows a solid gross profit margin of 99.2% for TTM, indicating efficient cost management. The net profit margin has improved to 22% in the TTM from 20.8% in 2024, reflecting enhanced profitability. Revenue growth is modest with a 0.9% increase in the TTM period. However, EBIT margin at 25.4% is strong, and there's a notable recovery from the negative EBIT recorded in 2024.

Balance Sheet

The balance sheet reflects a stable equity position with an improving equity ratio of 7.2% in the TTM. The debt-to-equity ratio is relatively high at 0.93, posing a potential risk, although it has decreased from 1.31 in 2024. Return on equity is favorable at 10.7% for the TTM, indicating solid returns for shareholders.

Cash Flow

State Street's cash flow situation is challenging with a negative free cash flow of $6.54 billion in the TTM, although there is slight improvement from $14.14 billion negative in 2024. Operating cash flow is negative, suggesting cash generation issues. The operating cash flow to net income ratio is also unfavorable, indicating reliance on non-operational cash sources.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
13.05B	12.92B	11.95B	12.15B	12.03B	11.70B
	Gross Profit
12.94B	12.92B	11.52B	11.75B	11.58B	11.21B
	EBIT
2.72B	-13.05B	2.74B	4.76B	3.17B	2.90B
	EBITDA
2.03B	0.00	3.38B	4.41B	4.28B	3.99B
	Net Income Common Stockholders
2.87B	2.69B	1.94B	2.77B	2.69B	2.42B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.66B	62.04B	48.57B	101.60B	183.39B	179.47B
	Total Assets
372.69B	353.24B	297.26B	301.45B	314.62B	314.71B
	Total Debt
36.70B	33.11B	21.50B	17.09B	13.60B	17.79B
	Net Debt
20.19B	29.97B	-70.27B	-88.47B	-96.39B	-102.64B
	Total Liabilities
346.00B	327.91B	273.46B	276.26B	287.26B	288.51B
	Stockholders Equity
26.69B	25.33B	23.80B	25.19B	27.36B	26.20B
Cash Flow		Free Cash Flow
-4.37B	-14.14B	-126.00M	11.22B	-7.52B	2.97B
	Operating Cash Flow
-7.20B	-13.21B	690.00M	11.95B	-6.71B	3.53B
	Investing Cash Flow
-12.78B	-1.32B	12.74B	6.82B	-2.17B	-65.53B
	Financing Cash Flow
21.21B	51.79B	-13.35B	-18.43B	9.05B	62.17B

State Street Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 97.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STT, the sentiment is Positive. The current price of 97.74 is above the 20-day moving average (MA) of 92.43, above the 50-day MA of 87.86, and above the 200-day MA of 90.26, indicating a bullish trend. The MACD of 3.32 indicates Negative momentum. The RSI at 72.09 is Negative, neither overbought nor oversold. The STOCH value of 91.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STT.

State Street Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEIC	82 Outperform	$10.65B	18.58	26.62%	1.11%	10.23%	26.56%
TROW	82 Outperform	$21.60B	11.13	19.47%	5.09%	6.51%	4.52%
BK	77 Outperform	$64.63B	14.68	11.29%	2.08%	10.30%	49.77%
NTRS	73 Outperform	$21.01B	10.08	17.54%	2.78%	21.00%	137.62%
BEN	67 Neutral	$11.67B	32.41	2.84%	5.67%	7.02%	-60.38%
STT	65 Neutral	$28.03B	11.04	11.21%	3.02%	15.02%	66.71%
Sector *	64 Neutral	$12.82B	9.87	7.67%	17000.34%	12.39%	-5.85%

State Street Corporate Events

State Street Appoints John F. Woods as CFO

On April 30, 2025, State Street Corporation announced the appointment of John F. Woods as Chief Financial Officer, effective by August 25, 2025. Woods, who has extensive experience in finance leadership roles at Citizens Financial Group and MUFG, will replace interim CFO Mark R. Keating. The appointment includes a comprehensive compensation package for Woods, reflecting his transition from Citizens and aligning with State Street’s executive compensation framework.

Spark’s Take on STT Stock

According to Spark, TipRanks’ AI Analyst, STT is a Neutral.

State Street’s overall score reflects its solid profitability and attractive valuation, which are somewhat offset by high debt levels and negative cash flows. Technical indicators suggest caution, while the earnings call provides a positive outlook for future growth despite some challenges.

To see Spark’s full report on STT stock, click here.

State Street Reports Strong Q1 2025 Earnings Growth

On April 17, 2025, State Street reported its first-quarter 2025 results, highlighting a 49% increase in earnings per share (EPS) to $2.04 and a 5% rise in total revenue. The company achieved positive fee and total operating leverage, with servicing fees up 4% and management fees up 10%. State Street also announced the redemption of its $1 billion Senior Notes due 2026, planned for May 18, 2025, using cash on hand. This move reflects the company’s strong financial performance and strategic focus on capital management, positioning it well amidst geopolitical and economic uncertainties.

Spark’s Take on STT Stock

According to Spark, TipRanks’ AI Analyst, STT is a Neutral.

State Street’s overall score reflects strong earnings growth and strategic initiatives leading to positive revenue trends. However, challenges in profitability metrics and cash flow generation weigh on the financial performance. The technical indicators suggest caution due to bearish trends, while the valuation remains attractive. Recent corporate events and earnings call provide a positive outlook for future growth.

To see Spark’s full report on STT stock, click here.

State Street Highlights Growth at RBC Conference

On March 5, 2025, State Street’s executives participated in the RBC Global Financial Institutions Conference, highlighting their strategic growth initiatives and financial performance. The company reported significant revenue and asset growth from 2022 to 2024, driven by a focus on high-growth areas such as ETFs, non-U.S. markets, and wealth distribution channels. This strategic focus has resulted in higher revenues, asset under management growth, and pre-tax margin expansion, positioning State Street for continued growth.

State Street to Redeem $500M Senior Notes Early

On February 26, 2025, State Street Corporation announced its plan to redeem its $500 million 2.901% Fixed-to-Floating Rate Senior Notes due 2026 on March 30, 2025. The redemption will be at the principal amount plus accrued interest, with payment scheduled for the next business day. This move indicates State Street’s strategic financial management, utilizing cash on hand to fund the redemption, which may impact its liquidity and financial positioning.